Interview Series: Community with a Shared Future for Mankind
EP12: David Blair on China's high-standard opening-up in promoting global development and prosperity
In today’s world where economic recovery remains fragile and development gap is widening, China has stood out as an advocate of the right course of economic globalization. By advancing high-standard opening-up, China is sharing its development dividends with the entire world as it works to build a community with a shared future that is cooperative, open, and mutually beneficial for all.
Today, we are honored to have David Blair, vice president and senior economist at the Center for China and Globalization (CCG), join us for this interview to shed light on the significance of China's high-standard opening-up in promoting global development and prosperity.
Dr. Blair, welcome
Q1: In recent years, as the contribution of exports to economic growth declines, domestic consumption is becoming increasingly important. In advancing high-standard opening-up, China emphasizes using its domestic demand potential to better connect the domestic and international markets. What’s your take on this?
David Blair: I think that the dual circulation is important, especially the domestic part of it is what's going to create a better economy, a wealthier economy, higher wage people in the future.
World trade has been really important as a growth engine since World War II. It's been a key driver and in making countries around the world wealthier, particularly China, but also quite a few other exporters. It allowed them to do the transition. But now a lot of transitions are accomplished. International sales will continue to be important to the Chinese economy and every other (economies), but it will not be a driver of future growth, you can't expect it to grow faster than GDP. The thing that will be growing faster than GDP is domestic demand driven by higher and higher wages. That's the growth engine of the future, especially for the big countries. I mean, (for) sort of the big three: US, China, European economy maybe the Indian economy, the domestic situation is much more important economically than the international situation
So going forward, probably domestic demand, or in US’s case, north American demand, and (for) China, Chinese demand combined with some sort of Belt and Road countries is probably the growth engines of the future.
Q2: Thank you, Dr. China has also adopted a series of policy initiatives to facilitate trade and investment liberalization. Against the current headwinds of de-globalization and rising protectionism, what are the implications of these measures for the world economy?
David Blair: You have to understand the difference between big countries and small countries. Most of the movement for international trade agreements coming from the United States over the last fifty years has been purely political, not driven by economics. It's the idea of spreading influence around the world. If you look at the reason the Trans-Pacific Partnership (TPP) failed in the US Congress is because even the people who were advocating the TPP would say that the return to the TPP for the United States is way less than one percent of GDP. So it's not an economic thing, it's more political. So the politics have changed. I don't think we're going to see any big trade agreement that the United States is part of going forward, and I don't think it could possibly pass US Congress. And the European Union has always been quite highly protectionist. So, I think we're probably moving to a more and more protectionist world.
China has been opening up its economy to foreign produce a lot, there have been a lot of steps over five years in opening up China’s economy. This is a really great thing for small countries. Because if you're not the US, European Union or China you're essentially a small country and you have to sell your products overseas, that's the basis for your economy.
May be (for) New Zealand, you produce dairy products, we can’t eat them all. So you need a big market to sell them into. Thankfully for those countries, China's opening up its market to them, and that will be very important going forward for their benefit. And also, I think its a good way of getting countries to cooperate.
There's a theory that trade leads to peace, it doesn't necessarily so, but it helps a lot people understand each other. So I think, opening up China’s market to smaller countries, especially in southeast Asia and countries along the Belt and Road, that's definitely a good thing for the future of the world.